3 Bucket Budget could be your answer to budgeting.
Are you strapped for cash every month? Are you tired of living paycheck to paycheck, and not being able to achieve your financial goals?
Do you want to take control of your finances? Well, you’re in luck because there’s a budgeting method that can help: the 3 bucket budget!
This simple budgeting method is a game-changer that can help you take control of your finances, save money, and become more frugal without sacrificing the things you love.
In this article, we’ll explore what the 3 bucket budget is, how it works, and why it’s a great way to manage your money.
What is 3 Bucket Budget?
A 3 bucket budget is a simple budgeting method where you divide your income into three categories, or “buckets”, and allocate a certain percentage of your income to each one.
The three buckets typically represent your needs, wants, and savings.
3 Bucket Budget: Here's how it works
Bucket 1: Needs (50% of your income) This bucket includes all the expenses that you absolutely need to cover, such as rent/mortgage payments, utilities, groceries, transportation costs, and insurance. Allocate 50% of your income to this bucket.
Bucket 2: Wants (30% of your income) This bucket includes all the expenses that are not absolutely necessary but that you enjoy or that enhance your quality of life, such as dining out, entertainment, clothing, and travel. Allocate 30% of your income to this bucket.
Bucket 3: Savings (20% of your income) This bucket includes all the money that you set aside for future goals and emergencies, such as retirement, a down payment on a house, an emergency fund, or investments. Allocate 20% of your income to this bucket.
By using this method, you can ensure that you’re meeting your basic needs, enjoying some of the things you want in life, and setting yourself up for a secure financial future. It’s a simple and effective way to manage your money and make sure that you’re spending it in a way that aligns with your priorities.
Why use 3 Budget Budget Method
Are you looking for a way to save money and become more frugal without feeling like you’re depriving yourself? Well, have no fear because the 3 bucket budget method is here!
This budgeting method is super easy and straightforward. All you need to do is divide your income into three categories: needs, wants, and savings. Needs are the things you must pay for to live comfortably, like rent, food, and transportation. Wants are the things you enjoy but aren’t essential, like dining out, entertainment, and travel. Savings are the funds you set aside for future goals and emergencies, like retirement or an emergency fund.
Here’s the fun part: you get to decide how much of your income goes into each bucket! Typically, you should allocate 50% of your income to needs, 30% to wants, and 20% to savings. But you can adjust those percentages based on your own financial priorities. Maybe you want to save more for a down payment on a house, so you allocate more to savings. Or maybe you’re planning a big vacation, so you allocate more to wants. It’s up to you!
The best part of the 3 bucket budget method is that it promotes frugality without making you feel like you’re missing out. By allocating a larger percentage of your income to needs and savings, you’re naturally reducing the amount you spend on wants. But you still get to enjoy the things you love without feeling guilty or stressed about overspending.
Plus, the 3 bucket budget method simplifies the budgeting process. You don’t need to track every single expense or worry about complicated spreadsheets. Just allocate a percentage of your income to each bucket and you’re good to go!
Overall, the 3 bucket budget method is an awesome way to manage your money, save for the future, and become more frugal without feeling like you’re sacrificing fun or pleasure. So why not give it a try? Your wallet (and future self) will thank you!
By using the 3 bucket budget method, you can take charge of your spending, simplify your finances, and build a solid financial foundation for your future. Plus, it’s a fun way to keep track of your money and see where it’s going.
So if you’re ready to be a money superhero and make your bank account soar, give the 3 bucket budget method a try. Your wallet (and inner budgeting superhero) will thank you!
There are a few other household budgeting methods that might interest you Envelope Budgeting, 50/30/20 rule, Cash Stuffing, all offer you a unique way to manage your money.